Pam and Jim are playing a game. It’s a classic of game theory, and it’s played to demonstrate the importance of fairness in normal social situations. So Pam and Jim are standing there, and Pam is given $100. The catch is, she can’t actually keep it without Jim’s approval. She needs to make him an offer. If he rejects her offer, neither of them get anything.
If Jim is able to consider the matter without emotion (computer-like), he’ll realize that he should take any offer that isn’t zero. After all, even $1 is more than he would have otherwise. A computer would take a single solitary cent over the alternative.
In practice, however, people in Pam’s situation almost always make fair offers. Half is typical. Anything less and the relationship is damaged, trust is lost… the offer tends to be rejected. $30? “That isn’t fair! I’m being cheated!” we think. “They get $70 and I only get $30? What a jerk!” So we say no, and nobody gets anything.
Why is this? Human beings (genetically, = by default) make their win/loss calculations based on potential loss rather than potential gain. Our automatic fairness calculator says that that $30 offer is in fact a loss of -20, because it isn’t fair. Accepting an unfair offer feels wrong, as though we’re rewarding the other person for shady behavior.
In fact, it’s likely that the reason we do this is precisely to encourage fairness and to punish unfairness. We spread the word, and the unfair person is quickly ostracized.
TLDR; when you’re making your calculations about whether or not to be fair, remember that unfairness is disproportionately despised. Meaning, people will dislike you more for being unfair than they would like you for being fair. They’ll also talk about it more.
